Chinese Sales Picture

As has been referenced with respect to individual metals, rising trade tensions have had a generally depressive effect on multiple levels of the Chinese economy. The U.S. and China have already traded $50 billion in tariffs apiece, and the U.S. is currently reviewing additional potential tariffs on Chinese goods valued at $200 billion.

NAFTA Talks

Speaking of trade tensions, the U.S. and Mexico recently agreed in principle to revise certain provisions of the North American Free Trade Agreement (NAFTA), the 24-year-old trilateral trade pact.

One ongoing point of dispute was regional auto content; that is, the percentage of an automobile that must be made using North American materials in order for that vehicle to be sold in the North American market without tariffs.

According to the agreement in principle, the threshold for regional auto content would increase from 62.5% to 75%.

Last week, Canada picked up negotiations with the U.S., which have spilled into this week.

In a phone conversation with Mexican President Enrique Pena Nieto, Trump zeroed in on Canada’s dairy industry and suggested the U.S. could impose tariffs on automobiles from Canada.

“You know, they have tariffs of almost 300 percent on some of our dairy products, and we can’t have that. We’re not going to stand for that,” Trump said.

“I think with Canada, frankly, the easiest thing we can do is to tariff their cars coming in. It’s a tremendous amount of money and it’s a very simple negotiation. It could end in one day and we take in a lot of money the following day.”